Alan R. Fusfeld

Assessing the Value of Your Technology

OVERVIEW:R&Ds role in the innovation process can be meaningfully represented by a hierarchy of managerial factors (The Technology Value Pyramid) that provide the foundations, links to strategy and financial outcomes for the corporation. The recognition of these TVP factors, together with an assembled menu of metrics, allows the model to be used to track the contribution to innovation performance at different levels of the TVP. The TVP model can be used to track the performance both prospectively and retrospectively, to diagnose weaknesses in the R&D organization and to plan for improvement in R&D contribution to the corporation. The various R&D stakeholders have different interests and perspectives on the innovation process, and these are accommodated by the TVP model and the menu of metrics.

Resolving Uncertainty in R&D Portfolios

OVERVIEW: Two major reasons for the limited success of R&D portfolio analysis are failure to address qualitative information and reliance upon single-point values for estimates rather than focusing on the key drivers of uncertainty. Uncertainty should be addressed as a principal aspect of the analysis throughout the life of the project. Key metrics and their weightings must also change as one moves from early through later stages of a project. Results of the project assessments can be summarized in a series of charts, including probability of success versus NPV (using ellipses), project sales over the next five years, resource allocations on each project, and the listing of key sources of uncertainty for each project.

Integrating Roadmapping into Technical Planning

OVERVIEW: Developing a roadmap within a single product line or a single autonomous business unit is relatively straightforward. A substantial body of literature exists on the process of generating roadmaps at the product, group or business-unit level. However, additional factors need to be considered when extending roadmapping to an integrated view of several highly autonomous business units. The customer base, the rate of product turnover, and the planning horizon will vary across business units. The architecture of the integrated roadmaps and the model for supporting the process should fit the structure and organization of the company. Additional issues also can be anticipated in areas including the scope of roadmapping, the level of detail in the roadmaps, the security of the roadmap information, and the use of a standard taxonomy to integrate information from diverse organizations.

Determining a Project's Probability of Success

OVERVIEW: Until now, there has been no reliable, commonly accepted method for determining the probability of success of individual technical projects. Over the past few years, an IRI subcommittee has developed a core set of “anchored scales” for determining these probabilities by combining the inputs from multiple individuals in a method that is both more efficient and more reliable than previous methods. The scales were developed with inputs from a cross-section of IRI member companies whose goal was to create a common platform that could be easily modified by individual companies. Consequently, practitioners can use these scales as a starting point to customize this tool to fit their own particular circumstances.

Measuring the effectiveness of R&D

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Aligning Marketing and Technology to Drive Innovation

OVERVIEW: Creating breakthrough innovations requires alignment of both marketing and R&D processes within organizations. In a study aimed at determining the most effective practices for developing innovative new products, executives from 32 successful technology companies were interviewed. Success in achieving breakthrough innovation was found to depend strongly on the nature of a firms organizational structure, market research processes and corporate culture. Those companies with a history of successful breakthrough innovation have established processes that integrate marketing and technology functions. They utilize cross-functional teams that identify more strongly with the innovation project than with their functional orientation, participate in idea generation processes that marry marketing pull and technology push, engage both marketing and R&D staff in market research processes, and integrate R&D and market inputs when selecting innovation targets.

Is your firm's tech portfolio aligned with its business strategy?

OVERVIEW: Considerable work has been done by the Industrial Research Institute and other organizations to improve the efficiency of the technology function within a company. Protocols have been developed to evaluate projects, transform them from ideas to products or processes, and generate a balanced project portfolio. However, very little has been done to determine whether or not the portfolio developed is aligned with the companys business strategy, to achieve the company objectives. Consequently, an IRI committee developed a tool for testing this alignment. Ten “Alignment Dimensions,” covering many necessary areas of alignment, have been formulated for use as a communication tool between the different functions within a company. It is believed that more and better discussion will lead to integrated planning and, in turn, better results.

Success Factors in R&D Leadership: Leadership Skills and Attributes for R&D ManagersAnalysis of data from a large-scale survey reveal the behaviors, skills, and attributes that distinguish successful R&D leaders.

OVERVIEW: A wealth of information and research is available about business leadership in general and its importance, but much less attention has been given to the nature of R&D leadership specifically. Given the importance of innovation to most organizations’ success, and even survival, understanding the skills and attributes required to achieve success in R&D management is critical. To address this gap, IRI’s Research-on-Research working group R&D Leadership Skills and Styles sought to both identify leadership skills and attributes important to R&D success and to assess the relative importance of known leadership attributes for R&D compared to other business units. After identifying key themes in innovation leadership through a series of interviews with established technical leaders, the group embarked on comprehensive analyses of data from CCL leadership survey instruments to explore these themes. The analyses reveal a general perception that R&D managers are typically not as effective as those outside R&D on the majority of leadership skill measures, except in a small number of areas, most of which are technical. Further analysis of the interview trends and data suggests unique opportunities to develop successful R&D leaders by maintaining technical insight while expanding interpersonal skills. In other areas, R&D leaders would be well served by work to develop the leadership skills and attributes identified as generally important, as they are widely perceived as lacking a number of these attributes.

Exploring the Principles of R&D Leadership with Award-Winning R&D Leaders: Successful leadership depends on performance across eight key areas.

While much has been written about the attributes of successful leaders in general, limited literature is available regarding the attributes specific to successful RD team members then analyzed them to identify recurrent themes. Those themes were captured as a list of categories, which were reviewed with interviewees in a second set of discussions. …